How America Saves 2025: Key trends and insights

This detailed study of employer-sponsored retirement plans offers a blueprint for meeting the needs of all employees, setting them up for success at every stage of their lives, and enhancing outcomes through better plan design.

Despite economic pressures and uncertainties, retirement plan participants continued to make strides in 2024. A record 45% increased their deferral rates, and aggregate account balances rose by 10%.  

“As we examine more than two decades of retirement data, with various periods of market turbulence and economic volatility, it is clear that participants are incredibly resilient,” said Jeffrey W.  Clark, author of the report and head of defined contribution research at Vanguard. “For example, when analyzing the improvements in participation rate data over the past 20-plus years, there is no correlation to any economic or market volatility—only to plan designs. As automatic enrollment adoption increases, participation rates increase.”

The adoption of automatic enrollment continues to accelerate. The share of plans adopting automatic enrollment has grown from 10% in 2006 to 61% in 2024. Larger plans—those with 1,000 or more participants—were more likely to implement automatic enrollment, with 78% doing so.

Vanguard DC plans with employee-elective contributions

Contributions to Roth accounts—after-tax contributions that allow for tax-free withdrawals in retirement—continue to gain traction across various demographics, significantly among higher-income, longer-tenured participants. This trend is driven, in part, by enhanced plan availability and heightened tax awareness among retirement savers.   

The Roth option was offered by 86% of Vanguard plans at year-end 2024, and 18% of participants in these plans elected the option. That’s an all-time high. Thirty-six percent of plans offer Roth in-plan conversions (RIPCs), and 10% of plans offer an automatic RIPC feature to help participants maximize retirement plan savings.

Plan sponsors are increasingly offering options that help with investing and planning decisions. At year-end 2024, 67% of participants were invested in a professionally managed allocation—60% in a single target-date or balanced fund, and 7% in a managed account. Vanguard research shows that these solutions offer more age-appropriate equity exposure, continuous rebalancing, and help participants stay the course. 

Vanguard DC plans

Plan sponsors and consultants advanced plan design features that drove participation rates to all-time highs in 2024. Still, there were signs of increased financial stress—modest increases in hardship withdrawals among them—which underscores the need for financial wellness support in addition to retirement plans.

Among the ways plan sponsors have responded: providing access to financial advice to manage broader financial priorities and offering support for student loan repayment and emergency savings.

“The modest increase in hardship withdrawals indicates a powerful need for financial wellness and emergency savings resources for workers,” Clark said. “Most retirement savers balance multiple short- and long-term financial goals, and employers are increasingly seeking ways to support employee financial wellness within and outside of the 401(k) plan. Out-of-plan emergency savings vehicles like Vanguard Cash Plus aim to empower workers to stay focused on retirement saving.”